The IRS says: "SEP plans (that are not SARSEPs) only allow employer contributions. For a self-employed individual, contributions are limited to 25% of your net earnings from self-employment."
Net income is your take-home pay after taxes and other payroll deductions.
Wage earners can estimate net annual income by subtracting federal, state and local taxes paid year-to-date from the gross income earned year-to-date. This number is net income year-to-date.
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